Dennis Mortensen and Charlie Holbech are something of an anomaly in the tech world: serial entrepreneurs with an aversion to raising outside funds. "We are, perhaps naively, huge fans of bootstrapping," says Mortensen. They launched IndexTools, a Web-analytics company they sold to Yahoo in 2008, without any outside investment.

They didn't have that luxury for their latest venture, Visual Revenue, which makes predictive analytics software for media companies. Mortensen took the lead in their fundraising efforts after they begrudgingly accepted the fact that Visual Revenue wouldn't get off the ground without outside funding. It took two years for them to fully develop their product, pitch it to investors, and amass the capital needed to scale it. For Mortensen, that meant a lot of lunch meetings and after-work drinks with investors. Here's how it happened.

[Editor's note: Visual Revenue was acquired by Outbrain in early March.]

November 2009: A company is born

After the sale of IndexTools, Holbech and Mortensen stay on at Yahoo, where they receive work visas that allow them to stay in the country (Mortensen is Danish; Holbech is a British citizen from Hong Kong). "We spent six months bitching to everybody that we couldn't do anything new due to the visas," Mortensen says. At a Yahoo conference in Boston in 2009, they stop complaining and hunker down over cocktails to lay out a business plan for their new venture, Visual Revenue. Their citizenship worries turn out to be unfounded--both receive green cards within 60 days.

March 2010: Bootstrapping begins

Holbech relocates his family from Los Angeles to New York. Mortensen's Wall Street apartment becomes a de facto office, where the pair works with recently added co-founder and vice president of data modeling Alex Poon. They sink $150,000 from their savings into hiring employees and buying cloud server space through Amazon Web services. "An entrepreneur who hasn't bootstrapped a start-up doesn't know what pain is," says Mortensen. Life is made more bearable by the frequent home-cooked meals Mortensen's wife prepares for the group.

December 2010: Times get lean

Visual Revenue has a solid product built--but its bank account is drained. A handful of customers means a trickle of cash flow, but it isn't enough for Holbech and Mortensen to pay themselves a salary. The few new employees they bring on are paid the bare minimum. "I promised the guys we would work for free and scrape by for a year, and then we could eat," Mortensen says. "They started getting hungry." At this point, the pair realizes that bootstrapping isn't going to cut it. The co-founders need to start fundraising.

January 2011: Off to a rough start

Mortensen begins taking meetings with investors, friends, and basically anyone he thinks has more than $10,000 in a bank account to invest. Back at the office--which is now located in the New York Daily News building--Holbech takes the reins on operations, working weekends and 16-hour days while Mortensen is out pitching. "If you're fundraising, you might take your eye off the ball," Holbech says. "We weren't about to do that." Mortensen pitches an investor from Bessemer Venture Partners over lunch at Balthazar, a tony New York restaurant, scratching a business plan on the back of a menu. "I was so impressed with myself, but I look up, and he's just blank," Mortensen says. "There's no connect."

May 2011: A new approach

Realizing he needs a more ambitious pitch for investors, Mortensen stops writing business plans on menus and no longer pitches the company as a tidy little start-up. Instead, he starts thinking of Visual Revenue as an IPO-capable billion-dollar company. He emails Ariel Lebowits, the CFO of classified-ad company OLX, and meets him for lunch at Pret A Manger, a sandwich chain, on Manhattan's 36th Street. After a more audacious pitch over a sandwich and a Diet Coke, Lebowits agrees to put in $15,000 for a seed round. The goal is to raise $300,000.

June 2011: Practice makes perfect

With one investor solidly on board, Mortensen gets to work assembling a handful of other investors. Over Red Bulls, Mortensen meets with an employee of Lerer Ventures, a fund in New York City. The employee, who had previously interviewed at Visual Revenue, introduces Mortensen to the firm's managing director, Eric Hippeau--the former CEO of The Huffington Post. "I walk over there with no deck, and I pitch it on the whiteboard," Mortensen says. "I'm confident because I've pitched this 150 times before." Hippeau says the product clicked for him right away. "Dennis has a great sense of humor, and I appreciate that he's a repeat entrepreneur who runs a tight ship. It didn't take long to make the decision."


July 2011: Too much of a good thing?

Hippeau gets Lerer Ventures into the seed round and introduces Mortensen to investors at SV Angel, a San Francisco-based angel fund that also decides to invest. Mortensen is somewhat hesitant. "All of a sudden, we were oversubscribed--which sounds kind of arrogant--but it ended up being half a million dollars very rapidly," he says. Two other funds, NYC Seed and Kima Ventures, join the round for a total of $512,000. "It's really difficult to not fall in love with raising money," Mortensen says. "But that in itself is no success."

September 2011: Back at the table

With the seed round in the bank, Visual Revenue has 10 employees, and its product is in use in 15 newsrooms. Any reluctance Mortensen felt earlier at being oversubscribed has been put aside. "Hey, I've got my skis on; let's just continue," he says. After a discussion with Holbech, Mortensen sets out to raise a Series A round of funding. "We discussed it long and hard," says Holbech. "The decision was that we could simply run faster with at least another million."

October 2011: If at first you don't succeed...

Mortensen is invited back for another meeting with IA Ventures, a fund he unsuccessfully pitched a year earlier. "This time, I came back and showed them we'd done everything we'd promised we'd do," he says. The new pitch strikes a chord with Brad Gillespie, a partner at IA Ventures. He describes Visual Revenue as "the kind of company you couldn't stop thinking about--kind of like a girlfriend who could have been." Over two meetings, Mortensen twice lays out Visual Revenue's scaling plan on a whiteboard in IA's office.

November 2011: The big payoff

"The last meeting with IA, I said, 'Are we going to get married or not?'" says Mortensen, who had met with 10 other firms interested in leading Visual Revenue's Series A round. Gillespie and Mortensen walk through the city toward Union Square for an hour, hammering out details of the price, how much stock to set aside for future employees, and the composition of Visual Revenue's board. "It was a freezing winter night," Gillespie says. "By the time we got to the subway stop, we were able to shake on it." SoftBank Capital also invests, filling the round out to $1.7 million.

January 2012: Final score: $2.21 million

With money in the bank, Mortensen is feeling a new kind of pressure. "I think you feel a different sense of responsibility, because you are spending other people's money," he says. "It's easier spending yours, because if you fail, there are no disappointed faces." Visual Revenue's client list now includes USA Today and NBC, and the company is up to 25 employees. "This is turning into a real company," Mortensen says.